Also known as a sub-prime mortgage & adverse credit mortgage, a “Bad Credit Mortgage” is a product designed especially for people with a bad credit rating. Typically, it comes with a higher interest rate and longer term as people with a bad credit rating are deemed to be a higher risk. However, the market of bad credit mortgage has still considerably grown in the recent times in line with people with poor credit history.
When Can You Apply For A Bad Credit Mortgage?
To be a candidate for a bad credit mortgage, you need to have a poor credit score. There are a number of things that contribute to a bad credit, some of which have been listed below –
- Mortgage delinquencies
- Missed or late credit payments
- Debt to income ratio of 50% or higher
- Inability to meet everyday expenses, and more
How Much Can You Borrow With A Bad Credit Mortgage?
Typically, the amount you can borrow with a bad credit mortgage depends on factors, like your sources of income, your current debts, how big your deposit is, and of course your credit score. Whilst many first-time buyers can get the biggest mortgage they can, it is crucial to critically think about how much you are exactly borrowing & how much the mortgage would cost you.